China foreign trade decline contracts in November

Exports of mechanical and electrical products increased 1 percent to 7.32 trillion yuan, accounting for 57.6 percent of China's total exports in the first 11 months. Of these products, mechanical exports dropped 8.1 percent year on year while electrical products rose 5.2 percent.

In contrast, exports of seven traditional labor-intensive products dropped 2.6 percent to 2.64 trillion yuan, accounting for 20.8 percent of the total exports during the Jan.-Nov. period. Clothing exports led the drop with a 7 percent year on year decline.

China imported more iron ore, crude oil, grain and refined oil products in the first 11 months than the same period last year, while it imported less coal and steel products.

"Challenges will remain for Chinese trade given sluggish global growth and low commodity prices," according to Zhang.

"Hard landing" unlikely

Deng Haiqing, chief economist with JZ Securities said that "although both exports and imports were still in the negative growth arena, the performance was better than October as the decline contracted." The U.S. dollar may end its strengthening period, making a rebound of commodity prices possible.

On Tuesday, the central parity rate of the Chinese currency renminbi, or the yuan, weakened by 93 basis points to 6.4078 against the U.S. dollar, hitting the lowest since August 27 this year, according to the China Foreign Exchange Trading System.

In a broad sense, "China looks most likely to muddle through rather than land hard. World trade indicators have improved marginally," according to a Fitch Ratings' report on "Global Economic Outlook" Tuesday.

"Policy stimulus has been stepped up in the eurozone and China and global consumer spending growth is holding up." Fitch said.

The State Council has rolled out a series of policies to boost foreign trade, including launching free trade zones and cross-border e-commerce pilot areas.

The Fitch report further forecast world GDP to grow by 2.6 percent in 2016 and 2.7 percent in 2017, up from 2.3 percent this year.

The agency believed China have the administrative and financial resources to avoid a "hard landing" although the growth is slowing "as the economy works through protracted structural adjustment and rebalancing."

 

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